Journal - Class 9 Elements Of Book Keeping And Accountancy - Extra Questions

What is the purpose of posting JF numbers that are entered in the journal at the time entries are posted to the accounts. 

JF stands for journal Folio. This number is entered in ledger at the time of posting the journal transaction in the ledger so that at the time of auditing, the records ledger posting can easily be verified from the journal book.


What is contra entry? How can you deal with this entry while preparing double column cash book?

Contra entries are those entries which take place between bank and cash. In this case when cash is deposit in bank and when cash is withdrawal for office use from the bank, both the entries are posted in easy book and Letter C is written in LF, Column so that these entries are not posted to the ledger account further. 

When the number of bank transactions is large, it is convenient to have a separate amount column for bank transactions in the cash book itself instead of recording them in the journal. 

This helps in getting information about the position of the bank account from time to time.Just like cash transactions, all payments into the bank are recorded on the left side and all withdrawals or payments through the bank are recorded on the right side. When cash is deposited in the bank or cash is withdraw from the bank, both the entries are recorded in the cash book. 

This is so because both aspects of the transaction appear in the cash book itself. When cash is paid into the bank, the amount deposited is written on the left side in the bank column and at the same time, the same amount is entered on the right side in the cash column. The reverse entries are recorded when cash is withdrawn from the bank for use in the office. Against such entries the word C will be written in the LF Column.


What is the purpose of contra entry?

Contra entries are those entries which take place between bank and cash. In this case when cash is deposit in bank and when cash withdrawal for office use from the bank, both the entries are posted in cash book and letter 'C' is written in Jf(Journal Folio) column so that these entries are not posted to the ledger account further.


What is difference between trade discount and cash discount?

Trade discount is given on the catalogue price of the goods while the cash discount is given on the invoice price. Trade discount is granted with the aim of increasing the sales in bulk quantity, whereas Cash discount is granted to facilitate a quick payment. A trade discount is shown as a deduction in the invoice.


Explain closing entries and adjusting entries.

  • A closing entry is a journal entry that is passed at the end of the accounting year to transfer balances from a temporary account to a permanent  account. All the expenses and gains or income related nominal accounts must be closed at the end of the year. In order to close them, they are transferred to either Trading A/c or Profit and Loss A/c. Journal entries required for transferring them to such account is called a 'closing entry'.

  • Adjustment entries are the journal entries that converts an entity's accounting record in an accrual basis of accounting. An accountant makes adjustment entries either before preparation of trial balance or after preparation of trial balance. 
Usually, adjustment entries after preparation of trial balance. 
In case adjustment entries are made after preparation of trial balance, each adjustment is treated twice while preparing trading and profit and loss account and balance sheet. 
In case adjustment entries are made before preparation of trial balance, such adjustment appears in trial balance. Also, such adjustment entries appear only once in the preparation of final accounts.


From the following particulars, ascertain the bank balance as per the Pass Book as on 31st December.
The Bank balance as per Cash Book on the date was Rs.11500.
Check issued but not cashed before the date amounted to Rs.1,750
Checks paid to bank, but not cleared before December amounted to Rs.2150
4.Interest on Investments collected by the bank but not entered in the cash Book amounted to Rs 275.
5.Local cheque paid in but not entered in cash Book Rs.300.
6.Bank Charges debited in the Pass Book Rs.25.

(a) Without adjustment in cash Book :
                                                                               Bank Reconciliation Statement
                                                                                      as on 31st December 
 
Bank Balance as per Cash Book
Add : Cheques issued not cashed
Add : Interest on Investments collected by the Bank but not entered
          in the cash Book
Add : Cheques paid in but not entered in Cash Book		   Rs.

1,750
  275

  300
     Rs.
   11,500



(+) 2,325 
 
Less : Cheques paid in but not cleared 
Less : Bank charges not entered in Cash Book		 
2,150
    25		 13,825

(-) 2,175
Bank Balance as per Pass Book  11,650
(b) With adjustment in Cash Book :
If the balance at Bank, as per the Cash 
Book adjusted, it will be $$Rs.12,050$$, thus :
Dr.                                                                                       Cash Book (Bank Col.)                                                               Cr.
 
Dec. 31
Dec. 31
Dec. 31		 
To Balance b/d
To Interest on Investment
To cheques omitted		     Rs.
11,500
    275
    300		 
Dec. 31
Dec. 31		 
By Bank charges
By Balance c/d		    Rs.
      25
12,050
   12,075   12,075
BANK RECONCILIATION STATEMENT will then appear as follows :
                                                                            Bank Reconciliation Statement
                                                                                  as on 31st December
 
Bank balance as per Cash Book
Add : Cheques issued but not presented		   Rs. 

1,750		   Rs.
  12,050
(+) 1,750 
 
Less : Cheques paid in but not collected
2,150 		 13,800
(-) 2,150 
Bank Balance as per Pass Book   11,650


'Panipat Blankets Limited' are the manufacturers and exporters of blankets. The company decided to distribute $$1,000$$ blankets free of cost to five villages of Kashmir which had been damaged by the floods. It also decided to employ $$100$$ young persons from these villages in their newly established factory at Ludhiana in Punjab. To meet the requirements of funds for its new factory, the company issued $$1,00,000$$ equity shares of $$Rs 10$$ each and $$2,000, 9\%$$ debentures of $$Rs 100$$ each to the vendors of machinery purchased for $$Rs 12,00,000$$. 
Pass necessary journal entries for the above transactions in the books of the company. Also identify any one value which the company wants to communicate to the society. 

Values involved in the scenario :
i) Creation of employment opportunities
ii) Working for social welfare.


Class 9 Elements Of Book Keeping And Accountancy Extra Questions